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Layoff Letter Due to Lack of Work [HR Template]

05 September
by Aley Brown
6 minute read

When your business loses clients, contracts, or market share, it can cause major issues within your organization. Specifically, with your human capital.

If the loss of one of these causes extreme impact, you might even have to layoff some of your staff. Which means you’ll need a layoff letter [due to lack of work] to send out to your affected employees.

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It is always stressful time when layoffs occur. Especially for HR folks! You carry the weight of not only conducting the layoff efficiently, but also seeing your coworkers and friends have their lives impacted by the layoff you are leading.

Sounds pretty stressful, right?

This is why it is so important to have an easy to use template available for you when situations like this arise. It will remove one more thing from your plate during this hectic time, allowing you to focus on other issues.

What does lack of work mean?

Well, when your organization experiences a lack of work, it means you have too many employees and not enough to keep them busy.

For example, think about group projects you participated in at school. Did it ever seem like 2 people did all the work while 5 others sat around watching?

That is an example of not having enough work for the amount of people involved. AKA - a lack of work.

And this can happen for several different reasons in the workplace. One of the most common is losing a client or a contract.

Layoff Letter Due to Lack of Work

If your organization has a huge contract with a client to provide them hundreds of hours worth of work, and then you lose the contract (or it is completed), what do you do with all of those workers?

Industries with regular swings in manpower like this generally rely on a mix of contract workers and temporary layoffs to ensure staffing alignment.

But what about other situations? Like when business just isn’t going so well? Or a new technology reduces a person’s workload?

There are several options in these situations. Some organization will reduce work hours of everyone, or give salary reductions.

But more often than not, human resources will layoff enough employees so that the amount of work and the number of staff are efficient within the organization.

As the human resources professional in charge of this, it will be extremely important for you to understand your business’s specific situation, and then use that to drive the methodology behind your workforce planning.

What should you include in a layoff letter due to lack of work?

Like any letter, the due to lack of work layoff letter needs to start by addressing the employee by name and getting straight to the point.

While it may seem like an okay idea to beat around the bush and break the news lightly, it’s not. Nothing you can possibly write in this letter is going to make the employee happier to receive it. So, start the letter quickly by saying what is going on.

Something like this:

"Dear [Employee Name],

As you know, we have recently experienced a downturn in client revenue, and have aligned our new business lines to meet our new objectives taking this into account. We are taking this action to adapt to the market with new products & processes. Unfortunately, this action means that restructuring with in your department is necessary due to a lack of work.

Due to this restructuring, we have come to the decision to eliminate positions within the organization. It is with deepest regret that I must notify you of your position being eliminated from the organization."

Explain that the company is restructuring due to a lack of work and that their job is impacted. If you want to give a little more detail, wait until the second paragraph.

This brings us to the next point:

The Middle of the Letter

Okay, so we’re midway down the page now. You can take this time to explain a little bit about why the layoff happened. Just like the layoff meeting - which you will still have to have, by the way. Layoff letters don’t get you out of having a conversation even if they overlap in content - you should explain that this is a move based on X reasons.

Don’t put blame on the employee. Don’t try to console them too much either. Explain, openly, why your company is restructuring.
 

For example, you could say this from the letter example above:

“Due to this lack of work causing restructuring, we have come to the decision to eliminate positions within the organization. It is with deepest regret that I must notify you of your position being eliminated from the organization.”

This shows that you care while also telling them what is going on. It consoles but not too much. You’re not in there apologizing and trying to make the process feel better.

When learning how to write a lack of work layoff letter, the most important thing to remember is that this letter has to be professional, a bit personal, but - most importantly - honest. That means you have to keep a bit of distance in your writing while also knowing when to bring it in.

The Middle: Part Two

The middle actually has two parts to it. (Surprise!) The first, as we just said, is all about alerting the staff member of what is happening and how they are impacted. That part needs to be short and to the point.

Next, you need to transition the letter to setting up the layoff meeting. This involves stating that a member of HR will reach out to the staff member with a phone call to set up a time to go over the layoff process.

Layoff Letter Due to Lack of Work

Alert the staff member that benefits will be discussed during this meeting. You can let the staff member know that there will be outplacement services included in these benefits in the letter, though, because it lets them know right off the bat that they won’t be going through this transition alone, which can ease tension.
 

Here’s an example of how this section can look:

“Someone from Human Resources will call you to set up a meeting in the coming days to discuss this process and the overall implications. The HR representative will discuss with you your separation benefits. These benefits include the use of an outplacement service for assistance in finding a new position through resume writing and career counseling services. Please feel free to ask this HR representative any questions in relation to the position elimination.”

You can also add in how severance works, too, if you have a policy on paper. For example, if severance pay is based on how long the employee was with the company, you can reiterate that policy in this letter. Just make sure you don’t end up explaining everything because that’s what the meeting is for and you don’t want to send the staff member a book - just a notification and brief explanation.

The End of the Letter

This section of the letter is super short. Really, you just want to thank the employee for all they have done at the organization and then sign off.

Again, it’s important to stay on task here. Don’t go on and on after you have explained what needs explained. You can simply end with a one sentence send off and then start to call those who are impacted by the event.

Here’s an example:

“We appreciate all of the good work you have done during your employment.

Regards,

Executive Name”

That should conclude your letter and allow you to send it off. However, you also have to make sure you handle the event in a legal way, which means checking in with your legal team, especially when you are letting go of a group or have staff members that are over the age of 40 years old.

Other Resources

Although layoffs that result from a lack of work have a different origin than those caused by an event like a merger or acquisition, the resources needed to complete the reduction event are very similar. Download our resources below for assistance with your event:

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Download Our Layoff Script Here!

You can download our guide for selecting employees to layoff here.

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